In our December 2010 and April 2011 insolvency updates, we reported on the UK High Court and Court of Appeal decisions in BNY Corporate Trustee Services Limited v Eurosail. The issue before both Courts was whether Eurosail was insolvent by virtue of being unable to pay its debts under the balance sheet limb of the solvency test in section 123 of the UK Insolvency Act 1986. The Court of Appeal upheld the High Court decision that Eurosail was solvent, noting that it had not reached the "point of no return".

The English case Webster & Anor v Mackay is an appeal against a refusal to annul or rescind bankruptcy orders. The appeal was based on the assertion that the petition debt was not for a liquidated sum as required under section 267(2) of the Insolvency Act 1986. The debtors were obliged, as evidenced by a promissory note, to repay a loan of £200,000 to Mr Mackay. However, Mr Mackay also alleged a repudiatory breach of the loan agreement due to the failure of the debtors to provide accounts. 

Re Tames involved an application for the Court to approve a debtor's proposal to creditors under section 333 of the Insolvency Act. The applicant was the provisional trustee for the proposal and sought the Court's approval of the proposal's terms. If the proposal was accepted, Ms Tames (the debtor) would only pay $0.05 on the dollar to her unsecured creditors. The application for approval was opposed by ASB, one of Ms Tames' unsecured creditors.

In Dench v Gates, the New Zealand High Court considered its inherent jurisdiction to set aside a bankruptcy notice to prevent an abuse of process. Mrs Gates, the judgment debtor, had applied to the High Court to set aside a bankruptcy notice. The bankruptcy notice was based on an award of costs against Mrs Gates in respect of earlier District Court litigation initiated by her against Mr Dench, a solicitor, on the basis that he had conducted himself dishonestly while representing his client in a separate matter, in which Mrs Gates was the plaintiff.

Tegel sought summary judgment against Mr and Mrs Arnensen as guarantors of the obligations of Coastal Cuisine NZ Limited (In Receivership). The Arnensen's argued (in reliance on the equitable doctrine of marshalling) that Tegel ought not to be allowed to pursue the guarantees until the receivership of Coastal Cuisine had run its course.

In Bunting v Buchanan, the applicant shareholders sought discovery ahead of a hearing of their substantive application which involved the level of costs charged by two liquidators as a consequence of a drawn-out liquidation.

A recent decision of the High Court suggests that a creditor who has not objected to a notice given under section 292 of the Companies Act may be able to defend the claim at a later stage.

The High Court recently granted an application for an exemption from the requirement to send the liquidator's six monthly report to every preference shareholder of the company in liquidation. In FCS Loans Ltd (in liq) v Fisk & Anor, the High Court granted the liquidators' application for an exemption on the basis that the cost of supplying six monthly reports to the 3,141 preference shareholders (estimated to be $4,719.16) is not proportionate to any likely benefit to those shareholders from having the reports mailed to them.

In the recent case MSI (Holdings) Pty Ltd v Mainstreet International Group Ltd, the Queensland Supreme Court confirmed that receivers of a company in liquidation can commence legal proceedings in the name of the company without leave of the court, when those proceedings relate to the recovery of secured property.

Our September 2012 insolvency update featured the article "Disclaiming Landlord's Interest in a Lease - an Australian Perspective". This article discussed the Victorian Court of Appeal's ruling that section 568(1) of the Corporations Act 2001 (Cth) (similar to our own section 269 of the Companies Act 1993 (NZ)) allows a liquidator to exercise his power of disclaimer to extinguish the leasehold estate of a tenant.